Thursday, Credit Suisse initiated coverage of Agrium Inc. (AGU) stock with an Outperform rating and a price target of $66.
Analyst Yip noted that AGU's businesses span across the fertilizer value chain and he believes that investors underappreciate the diverse nature of the portfolio and particularly the value that the retail business brings to the company. The more stable earnings and cash flow stream in the retail business should help the company weather volatility in the wholesale business and provide the company with the balance sheet flexibility to invest in the rest of the businesses through acquisitions and internal growth projects.
In addition, the analyst said that AGU should benefit from its exposure to the nitrogen industry and trends that currently favor North American producers. Natural gas costs for spot-based producers have come down while costs for contract-based producers, which set the pricing floor for the industry, are on the rise.
In the long term, AGU has a good track record of making accretive acquisitions, and the analyst expects the company to continue creating value with this strategy. The proposed bid for CF is a good strategic move, as it would improve AGU's cost structure in the nitrogen and phosphate businesses, and increase its exposure to the favorable fundamentals in the North American nitrogen industry.
Based on the analyst's blended-valuation methodology that incorporates historical multiples, a sum-of-the-parts analysis, and a DCF analysis, his price target is $66. AGU has roughly 18% of upside potential from current levels, and the analyst rated the stock Outperform. The analyst believes it offers significant upside potential, as demand and earnings rebound over the next 12 months and as the market begins to appreciate the value of its diverse business mix.
Currently, AGU is up $1.34 or 2.40% and trading at $57.21.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.